700 SME Actors Answered The Main Problems of Their Business Failure, What are the results and solutions?


Running a business is something that many people dream of.

 

Who doesn’t want to have their own business? Work is not regulated by others, stands on its own feet and of course if profit will go into its own pocket as well.

 

But in fact, reality is not that beautiful.

 

Just like investing, running a business is also full of risks, especially for SMEs.

 

In fact, the percentage of their chance of making a profit is much smaller than the possible loss.

 

Based on research results from the Small Business Administration (SBA) Office of Advocacy, there are only about 80% of SMEs that survive in the first year.

 

Furthermore, in the fifth year, the percentage of SMEs that are able to survive is only around 45%-50%.

 

This means, if there are 10 shoe stores that open in 2022, then there will only be 5 stores that will last until 2027.

 

This number can even be smaller, if the product being sold does not have a characteristic that attracts customers.

 

How will it impact the Indonesian Business Market?

 

In Indonesia itself, according to the Ministry of Cooperatives and SMEs, the number of MSME actors continues to increase from time to time.

 

The amount is even equivalent to 99.99% of the total businesses in Indonesia.

 

Therefore, the above phenomenon will certainly be a big obstacle for business development in this country.

 

The fewer people who are entrepreneurship, the society becomes consumptive.

 

In addition, if many business actors go out of business, the unemployment rate will be even higher.

[Also read: Don’t Ignore It, Here’re Why It’s Important to Maintain a Business Reputation]

 

 

3 Main Problems in Business According to 700 SMEs and their Solutions

 

In terms of knowing what are the factors that make a business fail, Capterra, a business software company in the United States, conducted research with 700 respondents who were business people.

 

Through this research, it can be concluded what are the crucial problems that make many businesses fail.

 

Here are 3 crucial problems and their solutions!

 

1. Lack of HR Quality

 

Based on research, it turns out that there are around 20% of business people who admit that it is difficult to find the right employees to hire.

 

Many businesses fail to find qualified employees according to their needs and desires, which of course affects business productivity directly.

 

It doesn’t stop there, there are also many statements about the number of turnovers from their best employees who don’t feel at home at work.

 

Therefore, 40% of the employees who are considered the best filed for resignation within one year of work.

 

Only less than 20% are loyal and willing to work for more than 5 years.

 

Then, what is the solution?

 

Starting by looking for 3 to 5 candidates for each position can be a better start.

 

In this case, you can have many choices, and not focus on just one person who may apply first.

 

It’s even better if your business has a company blog or social media account that shows how the culture works in your place

 

This will attract many more potential applicants because they have seen the culture in your company first.

 

Now, after becoming an employee, the focus is on making them loyal. There are several ways to do this:

 

 

  • Show that they are appreciated and provide opportunities to continue to develop in terms of career or skills.
  • Have a good and consistent performance appraisal system.
  • Provide facilities for employees such as health and entertainment.

 

[Also read: Hestitate to Provide Installment Features? Here’s What You Need To Know!]

 

2. Difficulty in Business Financing

 

The purpose of a business is to make a profit.

 

So of course, in each period, business actors want their profits to continue to increase.

 

But it should be noted that higher profits are in line with increasing business capital financing.

 

For example like this, let’s say you get a net profit of 50 million every time you sell 100 jars of cookies.

 

If you want to double that profit to 100 million, then you have to sell 200 jars of cookies.

 

Well, to produce these pastries, of course, requires a lot of capital.

 

Many business actors find it difficult to develop their business because of financial problems.

 

So what are the possible solutions?

Don’t worry, you can use KoinBisnis from KoinWorks to get additional business capital of up to IDR 2 billion.

Interest is also low, starting at only 0.75% per month.

The application is also easy only through the mobile application, and without the need for any guarantees.

 

3. Competition is getting fiercer

 

The next crucial problem is the increasingly fierce competition in business.

 

There are around 16% of respondents who think that the potential for business failure is higher when facing increasingly competitive business rivals.

 

The competitors move very quickly and show significant changes, so that business people find it difficult to face the competition.

 

Even if they want to compete, they often lose because they set the standard too high just like their rivals.

 

In fact, they were not able to compete at the same level.

 

For example, you sell pastries at a price equivalent to cakes from a big brand.

 

Of course, it is very difficult to compete with these big brands because their name and market scope is much wider.

 

Then, what is the solution?

 

You can sell the same product, but with a different angle.

 

For example, selling pastries at student prices and more affordable.

 

This will make the target market shift to the lower middle class economy and it makes more sense to compete.

 

When you can identify the problems faced by business actors, then you can more easily find solutions to overcome these problems. Now, for payment system matters, use the Cashlez Payment Gateway which accepts various types of non-cash payments!


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